Business24 Newspaper 17th January, 2022 by Business24 Online

MONDAY JANUARY 17, 2022

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Monday January 17, 2022

Bawumia's technical skills and political insight helped us solve a big problem former President of Africa Dev't Bank

NO. B24 / 293 | News for Business Leaders

SEC warns public against Tizaa Ghana Fund activities

See page 5

See page 8

Nonreversal of benchmark values defeats industrial drive, says oil palm producers By Benson Afful

affulbenson@gmail.com

ilmar Africa Limited, the producer of Frytol Vegetable Oil and Fortune Rice, has closed its manufacturing plant in Ghana due to the influx of cheap imported cooking oil into the country. The company disclosed that the oil aspect of the business has been facing challenges due to the importation of cooking oils. “We wish to communicate to your good office some

he Oil Palm Development Association of Ghana says the suspension of the reversal of the 50percent benchmark value policy is a counterproductive measure to government’s aggressive steps towards the industrialization of the local economy. They cited initiatives such as the Planting for Food and Jobs, Planting for Export and Rural Development are initiatives that won’t thrive under the strategy that subsidises imports while Cont’d on page 2

Wilmar Africa shuts down manufacturing plant due to influx of imported cooking oil

Oil palm producers say closures are imminent in a few months from now if the situation of a takeover by imports remains the same

GNPC denies setting up offshore company in Cayman Islands

Cont’d on page 3

Global growth to slow through 2023, World Bank predicts

ollowing a strong rebound in 2021, the global economy is entering a pronounced slowdown amid fresh threats from COVID-19 variants and a rise in inflation, debt, and income inequality that could endanger the recovery in emerging and

By Benson Afful affulbenson@gmail.com

he Ghana National Petroleum Corporation (GNPC) has denied setting up an offshore company in the Cayman Islands to hold the 7 percent commercial interest it acquired in the Jubilee and Cont’d on page 3

Cont’d on page 16

Cont’d on page 2 Cont’d on page 2

Editorial / News

MONDAY JANUARY 17, 2022

Editorial

Benchmark value impasse: national interest must succeed

overnment has come under severe pressure from two trade associations since it announced plans to do away with the benchmark value system that offered some kind of respite to the importing public. The Association of Ghana Industries (AGI) is in support of the reversal because, to them, the blanket implementation of the policy defeats the very purpose for which it was introduced. But its sister trading body Ghana Union of Trader Associations (GUTA) remain strongly opposed to the decision. The benchmark value policy offered a 50percent reduction in the import value of some selected consumables and other

goods whilst the payable value of vehicles was also slashed by 30percent. Whereas members of AGI, comprised of industrialists and local producers mainly accessed this relief package to import inputs for what they produce locally, GUTA or in this case traders leveraged the same arrangement to bring in cheap and market-ready products into the country. As a result, locally made goods are not able to compete with foreign ones that have flooded the domestic market, a situation that the AGI has expressed their displeasure. Already, some big names in the manufacturing space, notably Wilmar Africa—producers of the

household brand Frytol—and Avnash Industries have indicated their intention to shut down their plants because of unfair competition from foreign similar or like products on the market. Oil palm producers have come out to say that suspending the reversal of the benchmark value policy will be counterproductive to government’s aggressive steps towards the industrialization of the local economy. Preferential treatments or incentives from government to the business community must bring positive returns to the national economy. As we continue to debate the reversal of the policy or otherwise, we must arrive at the decision that best serves the national interest.

Nonreversal of benchmark values defeats industrial drive, says oil palm producers Continued from cover

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maintaining stiffer conditions under which local industry— including the oil palm sector— must operate. “We are calling on the government to immediately reconsider its decision to indefinitely suspend the implementation of the review of the 50percent benchmark reduction policy. What faces us now is a big choice between the source of livelihood of over 24,000persons who depend on the productivity of the entire value chain of the oil palm sector and the profits of the few importers of edible oil products in the country,” the oil producers said. They added that the sector faces a serious situation currently and thousands of jobs will be lost if the suspension of the reversal of the benchmark value lingers on. “We find the indication of the government for more stakeholder engagement very worrying and intriguing. This is because for 2 years, government have been engaging with all relevant stakeholders consistently. We are baffled by what the objective of a further call for stakeholder engagement is and why an indefinite suspension of the implementation of the review at

this time.” The producers argued that some oil palm manufacturing organisations such as refineries have been through very challenging times with employee numbers due to low productivity caused by the influx of cheap imported finished oil products. “Over 500 temporary jobs have already been lost and further downsizing the staff numbers remain the only short-term option to save their plants Closures are imminent in a few months from now if the situation of a takeover by imports remains the same,” the producers said. Currently, two major oil refineries Wilmar Africa and

Avnash Industries have shut down their plants due to low demand, a situation the oil producers said is bound to escalate to other member in the planation and the oil mill subsector of the chain. They added that these large refineries who have shutdown recently were able to survive in the past two years due to export opportunities they developed within the sub-region. “These opportunities are all lost now as these destination countries have also taken steps to empower local production of oil palm products to create jobs and reduce import to save their economies,” they added.

News

MONDAY JANUARY 17, 2022

GNPC denies setting up offshore company in Cayman Islands Continued from cover TEN oil blocks from Occidental Petroleum. The corporation explained that to enable the negotiations with Kosmos for the sale of Anadarko WCTP to proceed, Anadarko incorporated a company called Jubilee Oil Holdings Limited ( JOHL) in the Cayman Islands. This company, the GNPC said, was to hold the 7 percent commercial interest in the interim “while the parties negotiated and finalised the commercial terms of the transaction.” “Anadarko Offshore, the seller, was eventually paid US$164,798,691.00 on 19th October 2021 in full settlement of the acquisition. Anadarko Offshore thereafter assigned JOHL to GNPC, as JOHL holds the 7 percent commercial interest. The corporation is currently in the process of transferring JOHL to GNPC Explorco. It was never a ploy by the corporation to ‘live

Finance Minister Ken Ofori-Atta

unto itself, not the law and the nation’s strategy for its existence’, as claimed by ACEP,” GNPC said. The Africa Centre for Energy Policy had said its checks revealed

that Jubilee Oil Holdings Limited was registered with Dr. K. K. Sarpong, CEO of the GNPC, and Freddie Blay, board chairman of GNPC, as directors.

It accused the GNPC of sidestepping the Petroleum Revenue Management Act in the setting up of a subsidiary company to manage the acquired interest.

Wilmar Africa shuts down manufacturing plant due to influx of imported cooking oil Continued from cover operational challenges that Wilmar Africa Limited, the oil side of the business, is facing that [are] affecting the business negatively,” the company said in a letter to its

workers’ union. It also attributed its operational challenges to the introduction of the government’s duty discount on benchmark value policy. It indicated that government’s announcement of the reversal of

the duty discount on benchmark policy was welcome news; however, it added, government has suspended action on the announcement. “Since the introduction of the government’s duty discount on

benchmark value policy, there has been a huge increase in cheap imported products into the country. This has made it very difficult for us to sell in the local market because imported oils from Asia are selling far cheaper than our product.” The company also highlighted the porous borders of the country as a factor. According to Wilmar, Ghana’s borders allow infiltration of smuggled oil products. “Secondly, Ivory Coast has decided to regulate the price of oil in their market, and they have set the price far lower than the prevailing price of local producers like us. Ghana being a close neighbour to Ivory Coast has encouraged smuggling into the country through our porous borders. All these factors are not making us competitive in the market,” it added. Wilmar said its oil stock has piled up in the warehouses, adding that sales have slumped significantly. It also asked for the suspension of the CBA [collective bargaining agreement] negotiations with the union, “as we do not have the environment to negotiate in good faith.”

MONDAY JANUARY 17, 2022

News

MONDAY JANUARY 17, 2022

Bawumia's technical skills and political insight helped us solve a big problem - former President of Africa Dev't Bank

former President of the African Development Bank, Donald P. Kabenuka has eulogized the Vice President, Dr. Mahamudu Bawumia for his immense contributions to the progress and impact of the bank to the African continent. Over a decade ago, Dr. Bawumia worked for the African Development Bank as a Resident Representative for Zimbabwe to oversee the restructuring of the country's struggling currency and economic crisis. The man who supervised the appointment of Dr. Bawumia to that challenging position, Donald P. Kabenuka who is in Ghana for the launch of the Pan- African Payment System, has given an insight into why Dr. Bawumia was appointed to that position, as well as the excellent work he did for the African Development Bank. Speaking at a ceremony last night to climax the launch of the Pan African Payment System, the former President of the African

Development Bank described Dr. Bawumia as a man of "highly developed technical skills with a very good political insight,", and also paid glowing tributes to his work, both for the African Development Bank and for Ghana as Vice President. "I don't want to flatter my brother here because he does not like flattering. But I recall when he joined us, he was coming from the Oxford. I spoke with him and I realised this was a young man with huge potential to help me solve one of the biggest problems I had at the time in one of the countries," said the former President of the African Development Bank. 'I needed someone with a combination of highly developed technical skills, very good political insight and a sense of where one could sense things strategically, and I appointed Bawumia to that position," Donald P. Kabenuka added. 'We have made a lot of progress,

the African Development Bank. I was privileged to lead that institution ten years ago, but with the help of Dr. Bawumia. Thank you Sir for what you did in the African Development Bank." The former head of the Africa Development Bank added that considering the work Dr. Bawumia has done for Ghana as Vice President, he doesn't

regret letting Bawumia leave the job, even though he was initially reluctant. 'I tell you, he did not disappoint. When he announced he was moving on for what he is doing now, I was very reluctant. But now seeing what you have done for your country, I think we made the right decision to let you go."

Ghana, Saudi Arabia to deepen ties

hana and Saudi Arabia have resolved to deepen trade and investment ties between them. The two countries firmed up their long-standing bilateral

relations in Accra yesterday when Ghana’s Minister of Foreign Affairs and Regional Integration, Ms. Shirley Ayorkor Botchwey, received a “special letter” from the Minister of Foreign Affairs of

Saudi Arabia, Prince Faisal Bin Farban Al Saud. The letter was delivered by the Charge d'Affaires of the Royal Embassy of Saudi Arabia in Accra, Mr. Saeed Al Baker.

Trade, investment Ms. Botchwey said considering the strong relations that existed between the two countries, there was the need for them to explore opportunities in the areas of trade and investment. She said when Ghana participated in the ‘Saudi Expo’, it would offer the country an opportunity to court Saudi investors. "It is something we have worked on for a very long time and we are hoping that we can make a lot of progress on it," she added. The Saudi Food Expo 2022, the biggest food, beverage and hospitality fair on Saudi Arabia's business calendar, is slated for the capital city of the Kingdom, Riyadh, from February 20 to 23, 2022. According to the minister, Saudi Arabia was a very important friend of Ghana, and that Ghana had recognised the invitation to participate in the expo. For his part, Mr. Al Baker expressed gratitude to Ms. Botchwey for the warm hospitality. He described the Saudi Food Expo 2022 as the biggest food, beverage and hospitality fair on the Saudi business calendar.

MONDAY JANUARY 17, 2022

News

MONDAY JANUARY 17, 2022

Vodafone Ghana Foundation impacts 8.5m lives

odafone Ghana Foundation, the charity arm of Vodafone Ghana through its sustainable social initiatives, has impacted the lives of 8.5 million Ghanaians in the previous year. The Head of Vodafone Ghana Foundation, Reverend Amaris Nana Adjei Perbi, made this known at an annual review session with the media in Accra. The assessment meeting created a platform for the foundation to evaluate its performance in the past and make projections for the year 2022. Interacting with journalists, Reverend Perbi stated that the foundation made remarkable strides in the areas of health, education, technology and social sector. “We have made tremendous impact with regards to supporting women in our communities. The foundation supported thousands of women on the Rural Ultrasound Scan project. Another significant project is our Healthfest initiative where we have our health on wheels. So, we come into various communities that people wouldn’t want to go and live in, those areas that do not have access to medical services. We go there and we make sure that we serve with our pharmaceuticals,

the doctors help us to administer and also check the health status of the various people that we encounter”, he said. “Also, we serve them with the National Health Insurance cards for free and with this, we have provided medical care to about 40,000 individuals. Additionally, 30,000 people have benefited from our Healthline Medical Centre where our in-house doctors pick calls to ensure they give consultation to people who need medical attention”, he said. Commenting on the Instant Schools, an e-learning platform launched to provide millions of young people in Africa with free access to online learning

materials, Rev. Perbi said 24,000 students benefited from the programme. Last year, the foundation launched the Kindred Partnership which opens the platform for every person in Ghana or entity to come on board to partner Vodafone Ghana Foundation in the quest to make more impact. And through this, the foundation has supported 20,000 young men and women. Speaking on technology, Rev. Perbi said, “We have also launched ICT hubs across the country in partnership with the Ghana Library Authority and we’ve been able to establish over four libraries in various communities

in the past. Furthermore, we are going to do more in this coming year with more collaborations”. Vodafone Ghana Foundation in the previous year engaged Viamo to improve lives via mobile. In an interview, the Product Manager, Nura Abdul-Rahman said the unique service offers customers free access to information on their favorite topics such as news, agriculture, sexual and reproductive health, weather or edutainment shows. Vodafone customers are therefore entreated to dial 321 to access this service. On his part, the Clinical Director of Vodafone Healthline, Dr. Byrite Asamoah said is outfit will extend healthcare services to deprived communities. “We realize that there are a lot of communities that have health facilities that, should I say, the unfortunate side of health inequality in that they have deprived doctors. And they also do not have the health resources that would be probably if we find in Accra. So, we're looking to extend our services to them so that they can be able to at least call into the call center and have a doctor help them manage their cases. We feel this would actually help improve the health outcomes in those areas”.

Woman Rising promotes local startups among youth

ANOE Woman Rising Hub in collaboration with Ghana Tech Lab has encouraged local startup culture within the local ecosystem to promote entrepreneurship among the youth in the country. The Local Startup summit themed, “Mobile Application for Sustainable Business Development and Job Creation” aimed at providing a platform for startup founders to pitch their innovative ideas to local investors and business leaders. The Project Lead for TANOE Woman Rising, Eugenia Korkor Martey, in her welcome address indicated that “The Local Startup Summit aims to promote and celebrate the startup culture within the local ecosystem and also to encourage entrepreneurship among the youth.” She added that the summit also aims to create an easy access to funding and business support for the early-stage startups. “The local startup summit creates a conducive platform for investors, innovators and

entrepreneurs to converge at one place to share ideas, experiences and explore areas of mutual interest and collaboration for a thriving digital economy,” she said. The mobile application development and use in Ghana has seen significant increase in solving sustainable issues in businesses following proliferation of internet and the STEM industry. Many top startups in Ghana, specifically, Accra are technologically inspired to provide solutions to their community that prioritizes convenience, timely delivery and above all sustainable solutions to their needs and wants. Ms Eugenia believes there are also pertinent community issues in Accra East that could be solved with the adoption of mobile application. “I live with the lifestyle of residence in Accra East coupled with an empathy trip, solutions can be provided to this busy community such as mobile apps to book their salon visits, find

affordable apartments, buy books online and even order for your favourite meal with your own recipe and have it delivered on time.” She reiterated that the opportunities are enormous such that mobile application will not only solve the challenges in Accra East but will also provide employment to the growing youth population in the community. The business pitch is an opportunity for trainees to present

their solutions to the challenges identified and to encourage execution of these projects for sustainable development and job creation. “The mobile application industry has experience graceful periods in providing sustainable solutions in Ghana. We believe these solutions should be extended to everyone in our communities who have needs and wants of which these apps can solve,” she concluded.

Maritime

MONDAY JANUARY 17, 2022

SEC warns public against Tizaa Ghana Fund activities T he Securities and Exchanges Commission (SEC) has warned the public against transacting business with Tizaa Ghana Fund. Tizaa Ghana Fund, reportedly promises up to 50% returns on investment in 10 days. But SEC has explained it does not regulate the company as it has not been licensed to engage in investing or trading for returns business. “Tizaa Ghana Fund has not been licensed by the Securities and Exchange Commission (SEC) to carry out any Capital Market activities including investing or trading for returns as mandated by Section 3 of the Securities Industry Act, 2016 (Act 929). Tizaa Ghana Fund is therefore not regulated by the SEC,” the Commission said in a notice. Meanwhile, the Commission has urged the public to consult it

for confirmation on the licensing status of any firm that engages in businesses related to investment. “The general and investing

public is further advised to consult the SEC through its tollfree line 0800100065 or mainline number 0302768970-2 to confirm

the licensing status of any firm offering products or services relating to investments in the Capital Market,” it added.

Standard Chartered appoints Dr. Sandie Okoro as Group General Counsel

tandard Chartered (the Group) has announced the appointment of Dr. Sandie Okoro as Group General Counsel. She will be reporting to Group

CEO, Bill Winters and be based in the UK. Dr. Okoro is currently Senior Vice President and World Bank Group General Counsel, and Vice

President for Compliance at the World Bank, and will join the Group in early-April 2022. Speaking about the appointment, Bill Winters said:

“We’re delighted to have a General Counsel of Sandie’s calibre joining Standard Chartered. Her extensive experience, industry achievements and accomplishments, and focus on championing social justice make her ideally suited for the role. I look forward to her valuable contributions in supporting our ambitious strategy.” Dr. Okoro said: “I am excited to be joining the team at Standard Chartered, which I have long admired for the breadth of services it offers across the globe, and the reputation it has built of innovation and putting people and their communities first. I am also thankful for an incredible five years at the World Bank Group, where I was humbled to work alongside colleagues and peers on some of the most urgent global development priorities. As I close an important chapter in international development, I look forward to starting a new one and contributing to Standard Chartered’s goals.” Dr. Okoro replaces David Fein, who retired as Group General Counsel at the end of 2021. He has remained with the Group in an advisory capacity and will ensure a smooth handover.

News

MONDAY JANUARY 17, 2022

Bagbin calls for stronger partnership in 2022

he Speaker of Parliament, Mr Alban Sumana Kingsford Bagbin, has called for a stronger partnership with government and civil society in promoting accountability during Parliament’s second year of his tenure. He has also asked for God's guidance and blessings for the legislature as it begins the second year of its four-year tenure, and also for the Executive, the Judiciary and all Ghanaians. Mr Bagbin, who is a former National Democratic Congress (NDC) Member of Parliament for Nadowli-Kaleo, won the Speaker position with 138 votes as against 136 votes by his contender, Prof. Mike Oquaye.

In a statement issued by the Public Affairs Directorate of Parliament, Mr Bagbin expressed appreciation to Ghanaians who had extended congratulations and encouragement to him as he concluded his first year as

Speaker of the Eighth Parliament. The statement expressed appreciation to Ghanaians for their support in his first year in office. He said he was touched by the love showed and the prayers

for him during his first year as Speaker. "The Speaker is touched and humbled by the love showed him and the prayers said for him on that occasion," it said and added that "He recognises that the overwhelming messages of goodwill are an indication that Ghanaians are following the work of the Eighth Parliament with lots of expectations and keen interest." The statement assured Ghanaians that Mr Bagbin would continue to do his best to ensure the growth and development of the country, especially in the area of parliamentary democracy and good governance.

Hungarian President visits Kumasi Wastewater Treatment Plant… as MoU is signed for 13 regions to also benefit

s part of his State visit to Ghana, the President of Hungary, Mr. János Áder, on Saturday toured the Kumasi Wastewater Treatment Plant (KWTP) at Adagya in the Ashanti Region. President Áder was in the company of his wife, the First Lady of Hungary, Her Excellency, Anita Herzcheq. The Hungarian President and his delegation who also included the Hungarian Ambassador to Ghana, Tamas Endre Feher, and the Managing Director (MD) of Pureco Kft, Mr Balint, were conducted around the facility by Dr Siaw Agyepong, together with the Minister of Sanitation and Water Resources, Mrs Cecilia Abena Dapaah, and the Ashanti Regional Minister, Mr Simon Osei Mensah. The 1,000 cubic per day KWTP, a collaboration between Pureco Kft, a Hungarian private sector wastewater technology leader, and JGC, was commissioned in 2021. The plant has the capacity to serve over two (2) million people in the Greater Kumasi Metropolitan Area in the Ashanti Region. It equally has the capacity to receive and treat 150 cesspit tanks of liquid waste trucks on a daily basis. Significantly, a Memorandum

of Understanding (MoU) was signed between JGC and Pureco Kft, as part of plans to replicate the wastewater treatment facility across the country. The Executive Chairman of JGC, Dr Siaw Agyepong, signed for his group, while the MD of Pureco Kft, Mr Balint, initialled for his company, which was witnessed by Mrs Dapaah and Hungary's Ambassador to Ghana. In his welcome address, Dr Siaw Agyepong described the Hungarian President's visit to the plant as historic. "Today marks a great milestone in Ghana-Hungary relationship as the Jospong Group of Companies has an opportunity, to welcome, His Excellency the President of Hungary, Mr. János Áder, who is on a State visit to Ghana, accompanied by his wife and an official delegation to the Kumasi Waste Water Treatment Plant", he gladly expressed. According to him, the strengthened business relationship between Ghana and Hungary has brought loads of benefits to the private sector of both countries, "especially after the visit to Ghana in 2017 by the Foreign Affairs and Trade Minister of Hungary, Mr. Péter Szijjártó." "The Jospong Group of Companies took advantage of the new investment opportunity, opened between Ghana and

Hungary, after Mr. Péter Szijjártó’s visit, to initiate a number of private sector business consultations with Hungarian Private Sector companies. In the course of our deliberations, we established key partnerships with Pureco Kft, ANY Security Printing Plc and the Hungarian Exim Bank", he indicated. That, he added, was with the view of creating business opportunities that will help improve the lives of the Ghanaians. "Mr. President, the outcome of one such technical consultation was the conclusion of a Memorandum of Understanding between Pureco Kft and Zoomlion Ghana Limited for the construction of the Kumasi Waste Water Treatment Plant. The plant, which Your Excellency is visiting today, was constructed by Pureco-Unit Consortium, a Hungarian private sector water and waste water technology leader. It is the first of its kind in sub-Saharan Africa", he said. Dr Siaw Agyepong gave the assurance that his outfit and its partners will ensure the remaining regions benefit from the project, adding that JGC has

already commenced discussions to conclude an MoU with Pureco. "This is to enable the remaining 13 regions of Ghana, which have no access to waste water treatment plants, also to benefit from similar projects under Pureco-Jospong collaboration", he stressed. While heaping praise on the Akufo-Addo government for creating an enabling environment for players in the waste management space, Dr Siaw Agyepong commended President Áder for deepening Hungary's relationship with Ghana. "Your Excellency President János Áder, permit me to seize this opportunity to also thank you personally and your Hungarian Government for making available to the Jospong Group of Companies a Hungarian Government Exim facility to construct the plants", he said. Earlier, the President of Hungary paid a courtesy call on Asantehene, Otumfuo Osei Tutu II, at his Manhyia.

Comment/Analysis

MONDAY JANUARY 17, 2022

What's left of cambridge economics?

By James K. Galbraith

iane Coyle, an economist and professor of public policy at the University of Cambridge, has set a daunting task for herself: to provide a reasoned critique of the economics discipline from an insider’s perspective, while defending mainstream economics from the harsh – and mounting – criticism leveled by outsiders. In Cogs and Monsters, Coyle seeks to advance an engaged, policy-relevant vision of economics drawn from the work of leading academics in the field. The implication is that the pieces are there and need only to be assembled. “For economics itself,” she tells us, “the agenda is clear”: “We need to build on the work that already exists to incorporate as standard externalities, nonlinearities, tipping points, and self-fulfilling (or self-averting) dynamics. We need to revive and rethink welfare economics. ... We need a modern approach to the public provision and regulation of information goods, applying the rich literature on asymmetric information. ... And we need to put the social, not the individual, at the heart of the study of economics ...”1 Dismissing macroeconomists as “forecasters” (harsh, but not completely wrong), Coyle would prefer to dwell on the applied microeconomics that preoccupies most academic economists nowadays. This dodge allows her

to quote John Maynard Keynes on numerous side issues without having to account for the fact that he himself repudiated micro theory. Having shunted Keynes onto an intellectual siding, Coyle argues that it is microeconomists who have advanced the field beyond the simple doctrines of 40 years back; it is they who are now on the cusp of making economics into something useful. THE MICRO PERSPECTIVE One can understand and even sympathize with Coyle’s project. The real world has overtaken Friedrich von Hayek and his lead disciple, former British Prime Minister Margaret Thatcher. Today’s profound inequalities are becoming politically unacceptable. Financial crises are endemic, and now climate change is upon us, too. The freemarket, deregulate-and-privatize verities of Coyle’s professional youth have lost their appeal. But as Coyle points out, the discipline is still exceptionally disciplined. Academic success demands publication in one of only five “top” journals, all of which are tightly controlled by acolytes of the mainstream orthodoxy. For most economists today, the only practical way to get ahead is to build on (and therefore accept) that orthodoxy. Deference, even sycophancy, is required. Thus, Coyle herself recites from the catechism: “What markets do brilliantly, nevertheless, is coordinate the

use of resources in a process of discovery and challenge. The information signaled by the prices set by demand and supply is a wonderful coordinating device.” To be sure, the modern applied microeconomics that Coyle celebrates is scattered and diverse, often without the crisp self-assurance of freemarket legionaries from decades past. It makes room for those who question the axioms of “rational” economic calculation, showing by experiment that real people’s decision-making bears little resemblance to textbook predictions. The new microeconomists point to problems such as pervasive “asymmetric information” – a favorite theme of the very progressive neoclassical economist Joseph E. Stiglitz. Others emphasize common flaws and sources of friction in markets – sticky wages, sticky prices, monopoly power – while still others focus on social costs and the provision of public goods. And yet all these “departures” still hew to the orthodoxy that treats perfectly informed, fully rational, price-adjusting buyers and sellers in perfectly competitive markets as the ideal type. It doesn’t seem to matter that the ideal type doesn’t exist anywhere in practice and never has. The presumed purpose of economic policy is to iron out all the flaws so that the world will behave “as if” it conformed to the ideal. A characteristic manifestation

of this belief structure is the fashionable idea of “new antitrust,” which prescribes breaking up companies like Facebook, Google, and Amazon in order to ensure price competition in those industries. Another example is advocacy of carbon pricing as a mechanism to slow global warming. And even more pernicious is the case for “flexible labor markets” as a cure for joblessness. On this last point, Coyle writes that “both the Greek and Italian economies are widely thought to be hamstrung by an accumulation of regulations at the expense of competition, innovation and economic growth.” (Note the passive voice: “are widely thought.”) Mainstream economists may indeed think such things; but they are wrong. The Greek labor market was wholly deregulated a decade ago by IMF fiat. What disappeared was not unemployment but formal work and the middle class. Moreover, there is ample evidence that what is really good for jobs is union-driven wage solidarity, as practiced over the years in Scandinavia, Austria, and at times in Ireland. This fact has eluded mainstream economics and will continue to do so, because articles advancing such insights cannot get published in the “top five” journals. PRICES ARE NOT THE KEY TO EVERYTHING

CONTINUED ON PAGE 11

11 CONTINUED FROM PAGE 10 Coyle subscribes to the grand illusion that price adjustment is the economy’s prime mover. But as the Cambridge Keynesian economist Nicholas Kaldor noted in his slim 1985 book, Economics without Equilibrium, “the intuitive belief that prices are the key to everything” is simply wrong. The foundation on which Coyle places modern mainstream economics is a myth. As Kaldor put it: “... the important conclusion is that the signal that causes an economic ‘agent’ to do something different – produce more or produce less, or switch his manufacturing facilities from some varieties to others – is always a quantity signal, not a price signal. ... In the actual adjustment of supply and demand, prices play only a very subordinate role, if any.” (Emphasis added.) When I attended the University of Cambridge in 1974-75, I read Keynes, met Piero Sraffa, listened to Joan Robinson, and studied with Kaldor, Luigi Pasinetti, Richard Goodwin, Ajit Singh, Wynne Godley, Robin Marris, and Adrian Wood. Back then, it was understood at Cambridge that markets do nothing like what Coyle claims they do. Just as Einstein had erased Euclid’s axiom of parallels, Keynes’s General Theory had long since obliterated the supply curves for labor and saving, thereby eliminating the supposed markets for labor and capital. It followed that the prices of production were set by costs (mostly labor costs and interest rates), while quantities were determined by effective demand. Markets were not treated as if they were magical. It was obvious that most resources and components did not move under the influence of an invisible hand. Rather, they moved according to contracts between companies on terms set by negotiation, as had been the case for more than a hundred years. Technology was managed by organizations – mostly by large corporations – in what was sometimes called “the new industrial state.” But the Cambridge school of economics that understood these things has died out. It was targeted in the great intellectual purge of the Thatcher era, and it was pried from its footholds in North America by early-stage McCarthyism, Reaganism, the MIT self-proclaimed Keynesians, and the Chicago School. Only a few scattered survivors remain today. But while the economics

MONDAY JANUARY 17, 2022

discipline has changed, the real world is still as it was. It is not the never-never land described by Milton Friedman, Robert Lucas, or Hayek, nor could it ever have been. Coyle recapitulates Kaldor on two key points: the importance of product differentiation and what economists call “increasing returns.” But she describes the seemingly unmanageable complexity posed by “dozens of mobile phone packages, and [choices to] eat vegan or glutenfree in high street fast-food outlets” as proof, along neoclassical lines, of the impossibility of socialism. (A trip to China might have disabused her of this view.) In real life, as Kaldor noted, large organizations plan for diversity by maintaining inventories of inputs, not of finished goods, so that they can respond to changes in the demanded quantities of different items: “Even the manufacturer of standard articles is likely to sell numerous varieties of the same commodity (think of shoes, cameras, detective novels, refrigerators and cookers) all of which make use of much the same materials but are of a somewhat different design. ... In all these cases the possession of a large ‘input stock’ puts the manufacturer in a far more favorable position to satisfy his customers than possession of output stocks.” It is not such a hard problem. Companies, not markets, overcome the challenge of product diversity all the time. One need only abandon the notion that anything substantial depends on price signals. The question is why something that Kaldor emphasized back in the 1980s is not appreciated by an economist at the same university 40 years later. THE RETURN OF INCREASING RETURNS

“Economics,” Coyle correctly argues, “needs to have at its heart increasing returns and the kind of dynamics they imply. The characteristics of a knowledge economy are distinctive.” But this “vibrant area of research … is not yet the mainstream benchmark, and still less so in the lecture hall or the corridors of power.” As it happens, here is Kaldor on the same topic: “The progress of knowledge ... is very often the result gained from experience – learning by doing. And as the great American economist, Allyn Young, emphasized in his famous paper ‘Increasing Returns and Economic Progress,’ published shortly before his early death in the winter of 1928-1929 – a paper which for reasons that are not clear to me did not have the influence in his native country that it so clearly deserved – once we allow for increasing returns the laws of economics take on quite a different appearance.” (Emphasis added.) Young saw almost a century ago, and Kaldor emphasized 40 years back, that increasing returns generate cumulative causation: the advancing gains of leaders over laggards produce increasingly extreme inequalities and disequilibrium. Having reinvented these ideas, Coyle’s treatment of increasing returns in the digital age is the most perceptive part of Cogs and Monsters. She also is admirably aware of the problem of “data bias,” especially the prevalence of a priori category schemes in surveys that implicitly determine what economists choose to study, even though they are not necessarily material to the processes that need to be understood. (This particular problem has preoccupied me for decades, underlying my work on the measurement of inequality and much else.) Ultimately, these issues lead us right back not only to Keynes but

also to his “circus” of peers such as Kaldor, Sraffa, and Robinson. These earlier Cambridge economists did not develop “forecasting models,” and macropolicy prescriptions were, for them, a sideline. They and their successors (above all Pasinetti, who continues to publish in his 90s), practiced a unified theoretical economics that encompassed money, banking, production, employment and unemployment, market power, international trade, industrial corporations, and technological change. Coyle’s belief in a distinctive applied microeconomics based on markets and price signals is an artifact of the “neoclassical synthesis” constructed in postwar Cambridge. It was here – in Cambridge, Massachusetts – that MIT and Harvard economists bifurcated the discipline, reduced Keynes’s thinking to formulas, and set the stage for the Chicago cult of rational “microfoundations.” In view of increasing returns and data bias – trends that have been accelerated by artificial intelligence in the digital age – Coyle concludes that “economics needs to change.” She is surely right about that. But it is impossible for economics to advance as long as it remains anchored to the mainstream bedrock on which Coyle’s own training was based. Cumulative intellectual causation, theoretical evolution, and the development of ideas suited to new conditions will continue to be blocked. Keynes, Kaldor, and their Cambridge colleagues understood this perfectly. Yet, despite the brilliance of their intellectual firmament, only Keynes merits a quotation in Coyle’s book. Kaldor gets a footnote on an irrelevant point, and the rest are not mentioned at all. Cambridge has forgotten Cambridge, and it is poorer for it.

Creative Arts

MONDAY JANUARY 17, 2022

IP rights in Ghana’s creative industry: Finding the economic pathway

By Ekow Quandzie

ollectively, the creative arts ecosystem generates rich social, cultural and economic benefits that supports the livelihood of the creators, enablers and investors. Maximizing benefits is very key in sustaining the creative arts industry. The Robert Smith Law Group, in partnership with Ministry of Tourism and Creative Arts and the Attorney General’s Office last year December organized the Second Law for Society Public Seminar Series, with focus on intellectual property rights in Ghana’s creative arts ecosystem. It was quiet a packed day and the deliberations which were anchor of the broader theme: How to Monetize Benefits for Creative Artistes - focused on finding solutions to the teething challenges confronting creative arts. Chaired by the Deputy Minister of Tourism and Creative Arts, Mr. Mark Okraku Mantey, the programme witnessed highlevel industry players including talents, enablers and investors attending. The Hon. Deputy Attorney General, Ms. Diana Assonaba Dapaah was the Guest Speaker. The series had two panel discussions, The first panel discussed the experiences of notable industry personnel on IP right benefits while the second focused on the legal regime of the Copyright Protection in Ghana

and solutions to issues associated with the current IP monetization initiates. Among the key panelists were Boomplay General Manager Elizabeth Ntiamoah, Lynx Entertainment CEO Richie Mensah and venerable artiste Okyeame Kwame. The discussions focused on experiences with Intellectual Property (IP) earnings, the Copyright Protection regime in Ghana and solutions to the issues associated with current IP monetization initiatives. In his welcoming address, Bobby Banson, Lead Counsel at the Robert Smith Law Group reiterated the focus of the discussion as one aimed at proffering solutions to issues associated with royalty collection in the creative art industry.

the collection and distribution system and a failure to adapt to modern technology. She assured that Government, in accordance with the Copyright Act 2005 (Act 650) and the Copyright Regulations, 2021 (LI 1962) was in the process of studying the current regime of royalty collection and payment and would soon commence stakeholder engagement to ensure a licensing regime that accords with the rights conferred under the laws. Finally, she urged for effective stakeholder engagement, promising that government would welcome the policy suggestions that would made at the forum.

Maximizing IP rights in a digital era

Okyeame Kwame spoke on some of the benefits he has derived from the use of his IP. He revealed that music gave him the ability to build a brand and a hope, adding that it became his profession as well as a means of expression. However, his works are yet to commensurate with his financial gain. He noted that in the past 24 years, he had not made any economic gains from royalties on his creative work, his income streams have been from performances and streaming. Richie Mensah who has wealth of experience in his diverse roles in different levels of the music industry, stated that throughout his progression from performer,

In her keynote address, the Deputy Attorney General, Ms. Diana Assonaba Dapaah, begun by commending the Robert Smith Law Group for organizing the programme. She emphasized the pressing need for creative talents to maximize their IP rights in the advent of new technologies. She further noted that notwithstanding budgetary constraints, the government is still committed to fulfilling all his promises to Ghanaians. The Deputy Attorney General stated that issues with royalty collection emanate from two main causes - Lack of transparency in

to producer, and finally record label manager his efforts have not translated into money despite the massive impact on the industry. He was yet to make a single penny from his first advert which he made in the early 2000s. Talent, he lamented, is usually bullied. He noted that there is a huge untapped money stream in entertainment that artistes are not capitalizing on even though digital sales are soaring in some countries that is not the case in Ghana. Boomplay Manager Elizabeth Ntiamoah whose company operates in Ghana, Nigeria, and Kenya noted that Ghanaian artistes are not as insistent on their rights as other jurisdictions. This is because, compared to Kenya and Nigeria, Ghanaian artistes have little copyright literacy. Elizabeth Ntiamoah, however, noted that there is an increasing awareness and Ghanaian artistes are starting to understand their IP rights and building the voice to demand it. She noted that the problem also stems from a lack of technological literacy. “Even classical artistes do not know how to upload songs unto Boomplay.” This, she lamented, was a sad issue. Monetizing and understanding IP rights The second panel discussed Maximizing benefits for Creative

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Comment/Analysis

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the act.

artistes. The panelists were Nana Yaw Sompa, a Private Legal Practitioner; Abraham Adjetey, GHAMRO President and Nii Ofoli Yartey, popularly known as Seven, a well-known music right advocate and thought leader. The discussion begun with an overview of the legal regime on copyright protection in Ghana. Mr. Sompa Esq, gave an insightful brief of Copyright laws.

3. Under the Berne Convention for the Protection of Literary and Artistic Works (Berne Convention) of 1886 of which Ghana is a signatory, Article 11bis, music right holders have the exclusive right to authorize, a. the broadcasting of their works or the communication thereof to the public by any other means of wireless diffusion of signs, sounds or images; b. any communication to the public by wire or by rebroadcasting of the broadcast of the work, when this communication is made by an organization other than the original one; c. the public communication by loudspeaker or any other analogous instrument transmitting, by signs, sounds or images, the broadcast of the work.

1. There are two types of IP rights: Economic Right and Moral Right. Economic Right is the right to make monetary gain from one’s IP. According to the learned author Andrew Amegatcher in his book ‘Ghanaian Law of Copyright’, economic rights are the rights of exploitation of the work and the resulting right of receiving remuneration there from. 2. The Moral Right constitutes the right to receive authorship and referencing for one’s creative works. Per section 6 the author of protected copyright work has the sole moral right a. to claim authorship of the work and in particular to demand that the name or pseudonym of the author be mentioned when any of the acts referred to in section 5 are done in relation to the work, and b. to object to and seek relief in connection with any distortion, mutilation or other modification of the work where that act would be or is prejudicial to the reputation of the author or where the work is discredited by

4. These set of rights form part of our laws in Ghana, and is reproduced in Sections 5 and 6 of the Copyrights Act 2005, Act 690. 5. Section 5 of Act 690 grants the author of protected copyright work, the exclusive economic right to do or authorize the doing of the following; a. the reproduction of the work in any manner or form, b. the translation, adaptation, arrangement or any other transformation of the work, c. the public performance, broadcasting and communication of the work to the public, d. the distribution to the public of originals or copies of the work by way of first sales or other

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first transfer of ownership, and e. the commercial rental to the public of originals or copies of the work. 6. To aid artistes fully enjoy the economic rights associated with their work, Act 690 allowed for the creation of various associations to collect the monies due to artistes from their work. 7. Section 49 of Act 690 provides which is the basis on which artistes were allowed to form associations Collective administration societies of their choice to protect their IP: a. Authors, producers, performers and publishers may form collective administration societies for the promotion and protection of their interest. b. A collective administration society may, acting on the authority of the owner of a right, collect and distribute royalties and any other remuneration accruing to the owner. c. The Minister may, by legislative instrument, make Regulations for the formation, operation and administration of societies.” Mr. Abraham Adjetey of GHAMRO spoke on the impact of Section 49 of Act 690. He stated that even though the overarching regime of copyright protection had already been set up under Section 49, it is still not fully operational. He attributed this lapse to lack of governmental enforcement measures and also Artistes’ lack of interest in IP education initiatives. In very strong language he made a case of the forum, pointing out that very

few stars were minded to attend the programme. Nii Ofoli Yartey (Seven) reiterated the concerns about the poor enforcement framework for royalty collection. He however placed his blame on GHAMRO instead of the Attorney General’s Department. He insisted that the Attorney General having licensed GHAMRO to fix royalty collection rates and collect same, GHAMRO had the proper authority to enforce royalty collection. He called for proper accountability and admonished the union for not doing its best. Finally, he reiterated the need for stakeholder engagement to map out sustainable solutions to the issues raised at the forum. Finding the Pathway A summary of the insights and recommendations made at the forum are as follows: 1. Enhance copyright literacy among creatives 2. Talents must understand the role of technology in enhancing IP rights 3. The need for rigorous governmental framework to enforce copyright laws. 4. Create awareness of among Creatives on their IP rights. 5. The Attorney Generals Department must control collection agencies by revoking licenses if creatives are not paid. 6. There is a need for a stakeholder meeting to draw a roadmap to change the current trend.

MONDAY JANUARY 17, 2022

News

MONDAY JANUARY 17, 2022

Tenth-anniversary report to chart digital drive under way across Ghana’s financial services industry

he gradual implementation of digital services across Ghana’s capital markets and the part that tech-led solutions are poised to play in increasing financial inclusivity are among the topical issues set to be explored in a 10th-anniversary report by the global research and consultancy firm Oxford Business Group (OBG). The Report: Ghana 2022 will examine the country’s evolving digital financial services ecosystem, charting the innovations gaining traction following the introduction of key legislation, including the Payments and Services Act and the Electronic Transaction Act. It will also consider the role that Ghana’s high mobile penetration rate, which currently stands at around 65%, will play in supporting sectoral expansion. OBG’s coverage of these and other industry trends will be mapped out against the backdrop of Ghana’s broader finance sector, which is seen as having stabilised following far-reaching reforms, including the closure of insolvent banks, as the country eyes economic recovery. OBG has signed a fourth memorandum of understanding (MoU) with Stanbic Investment Management Services (SIMS), an investment management and advisory services provider

licensed by the Securities and Exchange Commission of Ghana, for its 2022 report. As part of the MoU, SIMS will team up with the Group to research and produce the Capital Markets chapter of The Report: Ghana 2022. Kwabena Boamah, Managing Director, SIMS, said he was delighted to be working with OBG on its forthcoming report, which comes with digitalisation already beginning to disrupt the way of doing business and investing in Ghana. “Many investment firms were forced to pivot quickly when the pandemic arrived, with some having made more progress than others in automation and rolling out online services,” he said. “We look forward to tracking these and the many other digital

developments that are expected to take Ghana’s financial services industry to the next level and redefine its investment landscape.” Wen Qian Chang, OBG’s Country Director in Ghana, agreed that the changes evident across Ghana’s financial services industry would be of significant interest to investors, adding that the topical issue of sustainable financing was another trend set to be explored in the report. “The pledges made at COP26 and reactions on the ground to the climate change conference served as a reminder that stakeholders now expect to see employment, social and governance principles given a priority in businesses’ strategies,” Chang said. “Rising interest in

ethical investment worldwide makes the agreement signed in May 2021 by Ghana’s Securities and Exchange Commission with the International Finance Corporation for the development of a green bonds market in the country particularly timely. I look forward to exploring this and other sectoral developments with market leaders and sharing our findings with our licence holders in this landmark anniversary report.” The Report: Ghana 2022 will be produced with SIMS, the Ghana Investment Promotion Centre, the Association of Ghanaian Industries, PwC and B&P Associates. It will be available online and in print. The yearly report will mark the culmination of field research by a team of analysts from OBG. The Report will be a vital guide to the many facets of the country, including its macroeconomics, infrastructure, banking and other sectoral developments. OBG’s publication will also contain contributions from leading representatives across the public and private sectors. Besides, OBG is currently producing tailored reports with its partners, alongside other highly relevant, go-to research tools, including a range of countryspecific Growth and Recovery Outlook articles and interviews.

Global food prices dip in December

orld food prices fell slightly in December as international prices for vegetable oils and sugar fell significantly from lofty levels, the Food and Agriculture Organization of the United Nations reported today. The FAO Food Price Index averaged 133.7 points in December, a 0.9 percent decline from November but still up 23.1 percent from December 2020. The index tracks monthly changes in the international prices of commonly-traded food commodities. Only the dairy subindex posted a monthly rise in December. For 2021 as a whole, averaging across the entire year, the FAO Food Price Index averaged 125.7 points, as much as 28.1 percent above the previous year. “While normally high prices are expected to give way to increased

production, the high cost of inputs, ongoing global pandemic and ever more uncertain climatic conditions leave little room for optimism about a return to more stable market conditions even in 2022, ” said FAO Senior Economist Abdolreza Abbassian. The FAO Cereal Price Index decreased 0.6 percent from November, as falling wheat export quotations amid improved supplies following southern hemisphere harvests more than offset firmer maize prices underpinned by strong demand and concerns over persistent dryness in Brazil. For the full year, however, the FAO Cereal Price Index reached its highest annual level since 2012 and averaged 27.2 percent higher than in 2020, with maize up 44.1 percent, wheat up 31.3 percent, but rice down by 4.0 percent. The FAO Vegetable Oil Price

Index declined 3.3 percent in December, with weaker quotations for palm oil and sunflower oil reflecting subdued global import demand that may be linked to concerns over the impact of rising COVID-19 cases. For 2021 as a whole, the FAO Vegetable Oil Price Index reached an all-time high, increasing 65.8 percent from 2020. The FAO Sugar Price Index decreased by 3.1 percent from November, reaching a five-month low, reflecting concerns over the possible impact of the Omicron COVID-19 variant on global demand as well as a weaker Brazilian Real and lower ethanol prices. For 2021 as a whole, the FAO Sugar Price Index rose 29.8 percent from the previous year to its highest level since 2016. The FAO Meat Price Index was broadly stable in December but over 2021 as a whole, the FAO

Meat Price Index was 12.7 percent higher than in 2020. The FAO Dairy Price Index was the only sub-index to increase in December, rising 1.8 percent from the previous month, as international quotations for butter and milk powders increased amid lower milk production in Western Europe and Oceania. Cheese prices declined marginally, reflecting a preference for Western Europe dairy producers. In 2021, the FAO Dairy Price Index averaged 16.9 percent higher than in 2020.

MONDAY JANUARY 17, 2022

Global growth to slow through 2023, World Bank predicts Continued from cover developing economies, according to the World Bank’s latest Global Economic Prospects report. Global growth is expected to decelerate markedly from 5.5 percent in 2021 to 4.1 percent in 2022 and 3.2 percent in 2023 as pent-up demand dissipates and as fiscal and monetary support is unwound across the world. The rapid spread of the Omicron variant indicates that the pandemic will likely continue to disrupt economic activity in the near term. In addition, a notable deceleration in major economies—including the United States and China—will weigh on external demand in emerging and developing economies. At a time when governments in many developing economies lack the policy space to support activity if needed, new COVID-19 outbreaks, persistent supplychain bottlenecks and inflationary pressures, and elevated financial vulnerabilities in large swaths of the world could increase the risk of a hard landing. “The world economy is simultaneously facing COVID-19, inflation, and policy uncertainty, with government spending and monetary policies in uncharted territory. Rising inequality and security challenges are particularly harmful for developing countries,” said World Bank Group President David Malpass. “Putting more countries on a favorable growth path requires concerted international action and a comprehensive set of national policy responses.” The slowdown will coincide with a widening divergence in growth rates between advanced economies and emerging and developing economies. Growth in advanced economies is expected to decline from 5 percent in 2021 to 3.8 percent in 2022 and 2.3 percent in 2023—a pace that, while moderating, will be sufficient to restore output and investment to their pre-pandemic trend in these economies. In emerging and developing economies, however, growth is expected to drop from 6.3 percent in 2021 to 4.6 percent in 2022 and 4.4 percent in 2023. By 2023, all advanced economies will have achieved a full output recovery; yet output in emerging and developing economies will remain 4 percent below its pre-pandemic trend.

For many vulnerable economies, the setback is even larger: output of fragile and conflict-affected economies will be 7.5 percent below its pre-pandemic trend, and output of small island states will be 8.5 percent below. Meanwhile, rising inflation— which hits low-income workers particularly hard—is constraining monetary policy. Globally and in advanced economies, inflation is running at the highest rates since 2008. In emerging market and developing economies, it has reached its highest rate since 2011. Many emerging and developing economies are withdrawing policy support to contain inflationary pressures—well before the recovery is complete. The latest Global Economic Prospects report features analytical sections that provide fresh insights into three emerging obstacles to a durable recovery in developing economies. The first, on debt, compares the latest international initiative to tackle unsustainable debt in developing economies—the G20 Common Framework—with previous coordinated initiatives to facilitate debt relief. Noting that COVID-19 pushed total global debt to the highest level in half a century even as the creditors’ landscape became increasingly complex, it finds that future coordinated debt relief initiatives will face higher hurdles to success. Applying lessons from the past restructurings to the G20 Common Framework can increase its effectiveness and avoid the shortcomings faced by earlier initiatives.

“The choices policymakers make in the next few years will decide the course of the next decade,” said Mari Pangestu, the World Bank’s Managing Director for Development Policy and Partnerships. “The immediate priority should be to ensure that vaccines are deployed more widely and equitably so the pandemic can be brought under control. But tackling reversals in development progress such as rising inequality will require sustained support. In a time of high debt, global cooperation will be essential to help expand the financial resources of developing economies so they can achieve green, resilient, and inclusive development.” The second analytical section examines the implications of boom-and-bust cycles of commodity prices for emerging market and developing economies, most of which are heavily dependent on commodity exports. It finds that these cycles were particularly intense in the past two years, when commodity prices collapsed with the arrival of COVID-19 and then surged, in some cases to all time-highs last year. Global macroeconomic developments and commodity supply factors will likely cause boom-bust cycles to continue in commodity markets. For many commodities, these cycles may be amplified by the forces of climate change and the energy transition away from fossil fuels. The analysis also shows that commodity-price booms since the 1970s have tended to be larger than busts, creating significant

opportunities for stronger and more sustainable growth in commodity-exporting countries— if they employ disciplined policies during booms to take advantage of windfalls. The third analytical section explores COVID-19’s impact on global inequality. It finds that the pandemic has raised global income inequality, partly reversing the decline that was achieved over the previous two decades. It has also increased inequality in many other spheres of human activity— in the availability of vaccines; in economic growth; in access to education and health care; and in the scale of job and income losses, which have been higher for women and low-skilled and informal workers. This trend has the potential to leave lasting scars: for example, losses to human capital caused by disruptions in education can spill over across generations. Ayhan Kose, Director of the World Bank’s Prospects Group, said: “In light of the projected slowdown in output and investment growth, limited policy space, and substantial risks clouding the outlook, emerging and developing economies will need to carefully calibrate fiscal and monetary policies. They also need to undertake reforms to erase the scars of the pandemic. These reforms should be designed to improve investment and human capital, reverse income and gender inequality, and cope with challenges of climate change.”

African Business

MONDAY JANUARY 17, 2022

Second African Leaders Summit to be held at St. Petersburg

By Kester Kenn Klomegah

ith high optimism and desire to strengthen its geopolitical influence, Russian authorities are gearing up to hold the second African leaders' summit in St. Petersburg scheduled early November 2022. The gathering, as expected, will focus on enhancing further constructive cooperation and advancing integration processes within the framework of the African Union and a number of sub-regional structures. In their first joint declaration, emerging from the Russia-Africa summit, at the initiative of African participants a new dialogue mechanism—the Russia-Africa Partnership Forum—was created. The declaration stipulated that all top-level meetings take place within its framework once every three years, alternately in Russia and in an African state. It says further that the foreign ministers of Russia and three African countries—the current, future and previous chairpersons of the African Union—will meet for annual consultations. Understandably, St. Petersburg, the preferred venue, was chosen primarily due to the continuous political instability in Ethiopia. Initially Moscow bagged hopes on using the Chinese financed and newly constructed African Union headquarters, which has modern facilities for large-scale

international conferences and the Addis Ababa city itself easily accessible with effectively built first-class Ethiopian Airlines network to and from many African countries. An additional advantage is that African government representatives and heads of many international organizations work in this city. South Africa and Egypt, as possible alternatives, were thoroughly discussed as South Africa and Russia are members of BRICS, and Egypt has excellent post-Soviet relations. Reminding that the first summit held in Sochi was co-chaired by President Vladimir Putin and Egyptian President Abdel Fattah el-Sisi, who also rotationally during that year headed the African Union. The large-scale Russia-Africa summit, held in Sochi in October 2019, and described as the first of its kind in the history of Moscow's relations with Africa, attracted more than 40 African presidents, as well as the heads of major regional associations and organizations. According to official documents, there were a total of 569 working meetings that resulted in 92 agreements and contracts, and memoranda of understanding signed as part of the summit. The first summit opened a new page in the history of Russia's relations with African countries. Sochi witnessed a historic final communique, and impressive

pledges and promises were made in various speeches and discussions. Last November, a group of 25 leading experts headed by Sergei A. Karaganov, the Honorary Chairman of the Presidium of the Council on Foreign and Defence Policy, released a report that vividly highlighted some spectacular pitfalls and shortcomings in Russia's approach towards Africa. It pointed to Russia's consistent failure in honoring its several agreements and pledges over the years. It decried the increased number of bilateral and highlevel meetings that yield little or bring to the fore no definitive results. In addition, insufficient and disorganized Russian African lobbying combined with a lack of “information hygiene” at all levels of public speaking, says the policy report. Writing early January on the policy outlook and forecast for 2022, Andrey Kortunov, Director General of the Russian International Affairs Council (RIAC), acknowledged the absolute necessity for consolidating Russia's positions in Africa. “A second Russia-Africa summit is planned for the fall of 2022. Its first edition, held in Sochi in October 2019, raised many hopes for the prospects of an expanded Russian presence in Africa. Obviously,

the COVID-19 pandemic has made some adjustments to these plans, preventing the parties from reaching the expected levels of trade and investment. Nevertheless, Africa still retains considerable interest in interaction with Russia, which could act as an important balancer of the prevailing influence of the West and China in the countries of the continent,” he opined. Kortunov suggested, therefore, that 2022 could become a “Year of Africa” for Moscow, a year of converting common political agreements into new practical projects in energy, transport, urban infrastructure, communications, education, public health, and regional security. Some policy experts expect high symbolism at the 2022 Russia-Africa summit. For example, Andrey Maslov, Head of the Centre for African Studies at Moscow's Higher School of Economics, said that preparations for the second summit would shape the RussiaAfrican agenda; visits would become more frequent and Africa would receive greater coverage in Russian media. Instead of measuring the success of the summit by how many African leaders attended, as happened in 2019, the parties have to give greater attention to

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18 CONTINUED FROM PAGE 17 the substance of the agenda, which is already under development. Russia should try to increase its presence in Africa while avoiding direct confrontation with other non-regional and foreign players, he underlined. According to him, the volume of Russian-African trade increased, for the first time since 2018, diversifying both geographically and in the range of goods traded. Shipments of railway equipment, fertilizers, pipes, high-tech equipment and aluminum are growing and work continues on institutionalizing the interaction between Russia and the African Union. “A number of conflicts are also causing alarm, primarily those in Ethiopia, Libya, Guinea, Sudan and especially the Republic of Mali where France and the EU are withdrawing their troops. In 2022, Russia will try in various ways to play a stabilizing role for Africa and assist in confronting the main challenges it faces - epidemics, the spread of extremism and conflicts, and hunger,” Maslov told The Moscow Times. A dialogue would begin on Africa formulating its own

MONDAY JANUARY 17, 2022

climate agenda, he said, and added: “Africa is beginning to understand that it does not need a European-style green agenda and will demand compensation from the main polluting countries for the damage the climatic changes have caused to the ecosystems of African countries. Russia is likely to support these demands.” In an emailed interview, Steven Gruzd, Head of the African Governance and Diplomacy Programme at the South African Institute of International Affairs (SAIIA), said Russia needs to upgrade or scale up its collaborative engagement with Africa. It has to consider seriously launching more public outreach programmes, especially working with civil society to change public perceptions and the private sector to strengthen its partnership with Africa. In order to achieve this, it has to surmount the challenges, take up the courage and work consistently with both private and public sectors and with an effective Action Plan. He told IDN: “I would largely agree that there is a divide between what has been pledged and promised at high-level meetings and summits, compared to what has actually materialized on the ground. There is more talk

than action, and in most cases down the years, intentions and ideas have been presented as initiatives already in progress. It will be interesting to see what has been concretely achieved in reports at the forthcoming second Russia-Africa summit scheduled for late 2022.” Despite the challenges, Moscow plans to boost Russia's presence in Africa noted Gruzd who also heads the Russia-Africa Research Programme initiated last year at SAIIA, South Africa's premier research institute on international issues. It is an independent, non-government think tank, with a long and proud history of providing thought leadership in Africa. Similarly, Chris O. Ogunmodede, an Associate Editor at the World Politics Review, wrote an analytical article in which he suggested Moscow demonstrateы that it can be a productive actor on the continent in ways that African citizens desire. So far, it has not managed to find a compelling way to do so. Russia is not part of the growing trend of outside powers competing for geopolitical influence in Africa. As for Russia's perception among African publics, there is little evidence there of a positive

trajectory either. Only 9 percent of Africans placed Russia at the top of their list when it comes to outside powers' positive image according to a 2021 finding, down from 14 percent the year before, he wrote in his article published mid-January 2022. According to him, Russian public diplomacy and soft power in Africa are weak and uncoordinated. That said, Russian engagement with Africa also has a logic of its own, and the fears of a purported Russian “return” to Africa are overblown. Russia's footprint on the continent as a whole pales in comparison to that of China, the United States and the European Union. Without doubts, Russian and African leaders will draw a comprehensive working map based on the discussions in St. Petersburg. The summit achievements will help to consolidate the aspirations of the African continent and African nations as fully as possible, as well as the aspirations, chart ways for materializing common priorities of Russia and the African countries within the framework of the African Union's Agenda 2063 and the 2030 Agenda for Sustainable Development.

Feature

MONDAY JANUARY 17, 2022

Regime change in the global economy By Michael Spence

n 1979, W. Arthur Lewis received the Nobel Prize in economics for his analysis of growth dynamics in developing countries. Deservedly so: His conceptual framework has proved invaluable in understanding and guiding structural change across a range of emerging economies. The basic idea that Lewis emphasized is that developing countries initially grow by expanding their export sectors, which absorb the surplus labor in traditional sectors like agriculture. As incomes and purchasing power rise, domestic sectors expand along with the tradable sectors. Productivity and incomes in the largely urban, labor-intensive manufacturing sectors tend to be 3-4 times higher than in the traditional sectors, so average incomes rise as more people go to work in the expanding export sector. But, as Lewis noted, this also means that wage growth in the export sector will remain depressed as long as there is surplus labor elsewhere. Because labor availability is not a constraint, the key factor with respect to growth is the level of capital investment, which is needed even in laborintensive sectors. The returns on such investment depend on competitive conditions in the global economy. These dynamics can produce startlingly high growth rates that sometimes continue for years, even decades. But there is a limit: when the supply of surplus labor is exhausted, the economy reaches the so-called Lewis turning point. Typically, this will happen before a country has climbed out of the lowermiddle-income range. China, for example, reached its Lewis turning point 10-15 years ago, which brought about a major shift in the country’s growth dynamics. At the Lewis turning point, the opportunity cost of shifting more labor from traditional to modernizing sectors is no longer negligible. Wages start to increase across the whole economy, which means that if growth is to continue, it must be driven not by shifting labor from low- to higher-productivity sectors, but by productivity increases within sectors. Because this transition often fails, the Lewis turning point is when many developing economies fall into the middleincome trap. Lewis’s growth model is worth

revisiting because something similar is happening today. When the global economy started to open and become more integrated several decades ago, massive amounts of previously disconnected and inaccessible labor and productive capacity in emerging economies shifted to the manufacturing and export sectors, producing dramatic results. Manufacturing activity relocated from developed countries, and emerging economies’ exports grew faster than the global economy. Owing to the sheer scale of relatively low-cost labor in emerging economies (especially China), wage growth in advanced economies’ tradable sectors was subdued, even when the activity did not shift to emerging economies. Labor’s bargaining power was reduced in developed economies, and the negative pressure on middle- and lowincome wages spilled over to non-tradable sectors as displaced labor in manufacturing shifted to non-tradable sectors. But that process is largely over. Many emerging economies have become middle-income countries, and the global economy no longer has any more large reservoirs of accessible low-cost labor to fuel the earlier dynamic. Of course, there remain pools of underutilized labor and potential productive capacity, for example in Africa. But it is unlikely that these workers will enter productive export sectors fast enough and at sufficient scale to prolong the pre-turning point dynamics. The Lewis turning point will have profound consequences for the global economy. The forces that have been depressing wages and inflation over the past 40 years are receding. A wide range of emerging and developed economies are growing older,

reinforcing the trend, and the COVID-19 pandemic has further reduced the labor supply in many sectors, possibly on a permanent basis. Under these conditions, the four-decade decline in labor incomes as a share of national income is likely to be reversed – though automation and other rapidly advancing labor-saving technologies may counteract this process to some extent. In short, now that several decades of developing-country growth have exhausted much of the world’s unused productive capacity, global growth is increasingly constrained not by demand but by supply and productivity dynamics. This is not a transitory shift. One clear consequence of this process is that inflationary forces have shifted fundamentally. After vanishing or flattening for an extended period, the Phillips curve (which describes an inverse relationship between inflation and unemployment) is probably back, permanently. Interest rates will rise along with inflationary pressures, which are already forcing major central banks to withdraw liquidity from capital markets. A highly indebted global economy (the legacy of years of low interest rates) will go through a period of turbulence as debt levels are reset for a “new normal” interest-rate environment. Portfolio asset allocations will be adjusted accordingly, and the extended honeymoon during which risk assets outperformed the economy will end. It is anyone’s guess how abruptly this will happen. Specific outcomes are impossible to forecast precisely. The global economy’s encounter with the Lewis turning point will be a period of considerable uncertainty, which is to be expected with any tectonic shift.

Many parts of the global economy will experience a fundamental regime change. Several decades of growth in emerging economies have driven a massive increase in middle-income consumers and overall purchasing power, while simultaneously removing the world’s ultra-low-cost productive capacity. Of course, there may still be periods of demand-constrained growth, following crises like the pandemic or future climatedriven shocks. But the underlying pattern will be one of supply- and productivity-constrained growth, because the remaining reservoirs of underutilized productive capacity simply are not large enough to accommodate growing global demand. Lewis’s work was not primarily focused on the global economy, except to the extent that international markets provide the technology and demand needed to fuel early-stage export-led growth in developing countries. Nonetheless, his insight that growth patterns shift dramatically depending on whether there are accessible untapped productive resources (especially labor) is as relevant as ever. Applied to the transitions now underway in the global economy, Lewis’s insights imply major changes in growth patterns, the structure of economies, the configuration of global supply chains, and the relative prices of pretty much everything – from goods, services, and labor to commodities and various asset classes. Equally important, they indicate that this transition will be irreversible. Navigating the global version of the Lewis turning point will be tricky. Understanding the underlying structural changes is the necessary place to start.

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How Binance is ensuring compliance through its updated API services to ensure a safe and fair-trading environment for all users

n creating a world where millions of people can come to participate in the ever-evolving cryptocurrency ecosystem to enjoy the freedom of money and financial inclusion, several factors must be in place to ensure a fairtrading environment for all. From the protection of users’ rights and funds to the deepening of education about crypto and the creation of profitable initiatives and convenient user experiences – these factors should remain topof-mind for all cryptocurrency exchanges operating today. The priority of these factors is security, to ensure a safe environment for crypto and blockchain users. Without security in check, the underlying risk of cyber-fraud and theft remains, with crypto wallets rendered permeable, and users left fearful about the safety of their investments, which would potentially deter more people from playing in the space. This is why in its quest to increase the adoption of cryptocurrency globally, Binance - the world's leading blockchain and cryptocurrency provider recently included an update in its Application Programming Interface (API) services to ensure that users’ protection is

prioritized to create a secure and sustainable crypto ecosystem for everyone. An API, which refers to a set of protocols for building and integrating software applications, allows a senior crypto trader, for example, to pull financial data and information from Binance, feed them into a trading program that determines the optimum move to make, and then send the trading instructions back to Binance to execute on those instructions. With this update in place, Binance has limited API actions to only accounts that have undergone intermediate identity verification to ensure the safety of its marketplace. By requiring accounts with API key creation access to pass through the intermediate KYC processes, each account is linked to a genuine human trader, which ultimately promotes security on

its platform. This update reflects the company’s unwavering commitment to its user’s safety, as these security verification steps will allow Binance to track who has access to its platform and prevent its misuse. Beyond the API update, Binance has also embedded other state-of-the-art security measures and strict data privacy controls across its ecosystem to ensure that users are well protected and have the crypto experiences that they deserve. With useraccessible tools such as twofactor authentications, stringent password requirements, and withdrawal address management tools, customers can easily be alert about suspicious activities and more. Binance also instituted a Secure Assets Funds for Users (SAFU) to allocate 10% of all trading fees received on its platform towards providing

Prudential, CAF signs agreement

rudential Africa has signed a sponsorship agreement with the Confederation of African Football (CAF) to become the official insurance partner of the 33rd edition of Africa Cup of Nations (AFCON) 2021. At a press conference to

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announce the sponsorship, the Chief Representative Officer of the Prudential Northern Africa Region, Mr Eric Mboma, said the sponsorship underscores Prudential’s commitment to the African continent. A press release issued in

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Douala, Cameroon by Prudential Africa on January 11, said “As we grow our business in Africa, we also want to support the passion and talent of its people. “Africans share a common love for football and we are honored to be part of a tournament that

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insurance to potential breaches in the case of emergency scenarios. The company has also harnessed the power of education towards minimizing the cases of vulnerability to fraud by consistently creating free educational content to spur literacy for users off and on its ecosystem. As established, security remains an integral part of the crypto sphere, determining how many users will be comfortable with investing their funds to eventually enjoy financial freedom. It is therefore pertinent for exchanges alike to work to ensure that safety measures for the best interest of users, communities, and regulators are in place to help generate sustainable growth in the industry. Being a leader in the digital finance space, Binance has been able to successfully approach security from various fronts, from the latest technologies and investments to people and education. This is an applaudable path towards preparing for the next billion users in the cryptocurrency world – by balancing the desires of early adopters with the concerns of the incoming majority, as well as governments and regulatory bodies at large.

unites the continent and brings together the brightest talents of African football,”. Common purpose The General Secretary of CAF, Mr Véron Mosengo-Omba, said in the release that, “We are excited and pleased to have on board Prudential as a partner. We share a common purpose in our commitment to developing local talent as well as driving prosperity for the people of Africa.” Mr Mboma added, “Through sports, Prudential wants to encourage people to stay active and lead more healthy lifestyles. As a life insurer, we believe that health and wellness are important for people to live fulfilling lives.” AFCON 2021 has already started and will continue till February 6, 2022 with Cameroon as the host nation.